Assuming billionaires were going to get a special tax, how would you actually determine how much to tax them? Sure some would be straightforward like Musk where it’s entirely derived from a few companies with known ownership stakes, but what about all the others?
We don’t even know the names of most of the billionaires. With all the games they can play to hide money, now made even easier thanks to the changes Trump made in his first few months, how would you even figure out who and what amount to tax? They don’t have a normal salary or easily documented income like everyone else.
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EDIT: formatting
A potential mathematical approach to equal taxation that works in any country:
- Calculate the average income of every citizen. Let A = the average income (amount per year)
- Set a baseline tax amount for the average (e.g. 10%). Let P = baseline tax percentage
- Given a person’s income, calculate how far above or below they are compared to the average. Let I = a person’s income. We can calculate the difference, D, with D = I - A. A positive value means the person’s income is above average, whereas negative is below.
- Calculate the difference as a percentage. Let Q = D / A
- Calculate the percentage of the tax percentage. This will determine how much more or less a person will have to pay: R = Q * P
- Finally, calculate the person’s unique tax amount: T = P + R. If R was a positive value, that means the person will pay more. If R was a negative value, they pay less. If R = 0, they pay the base amount.
Example: Let’s say the average income per year is $50,000 USD, and the baseline tax rate is 10%
So A =50,000 and P = 10% / 100 = 0.1
Given a person’s income: $30,000/yr:
I = 30,000
Calculate the difference:
D = 30,000 – 50,000 = –20,000
Q = –20,000 / 50,000 = –0.4 (–40%)
Calculate how much more/less the person pays:
R = –0.4 * 0.1 = –0.04 (–4%)
Calculate the unique tax amount:
T = 0.1 + (–0.04) = 0.1 – 0.04 = 0.6 (6%)
There might be a better set of formulas, but this is what I came up with. Let me know if I made a mistake in my math.
So someone with an income of $1M (20A) has a tax liability of $2M, and earning $10M means you owe $200M? At least with traditional tax brackets, it’s hard (but not impossible) to accidently get marginal rates over 100%.
Yeah, there’s probably a better set of formulas to use.
The main idea behind my idea is that people who make more pay more, whereas people who make less pay less. Additionally, those who don’t make money pay no tax as it works out mathematically.
I really like this approach. The only problem I see with this is that the measure of center you’re using for the calculation would have to be chosen well. Maybe a weighted average towards lower incomes or using a median, but properly choosing the measure of center would be really important along with verifying that a linear increase or decrease in percentage is also the best solution.
I think figuring out the rate at which taxation should increase relative to ones income should be the first step, then mapping that onto a set of equations that could calculate taxes would be the best approach.
You have a special division of the IRS whose job is to identify the top few hundred wealthiest individuals and then tax them. These people wouldn’t have to self report like the rest of us.
Idk how it is in the US but in Canada, they already have all our numbers. Really wouldn’t be hard to enforce except many billionaires wealth doesn’t come from their income.
Just tax assets too
Tax them? Nationalize their assets
I was going to write about how an existing tax agency (the California FTB) is already aggressive at tracking down high-earning residents that leave the state – whether in-fact or on-paper – in order to collect precisely what the state is owed per the tax code. That is, the FTB already engages and challenges the precise amounts that these former residents write on their final California tax returns, with some more spectacular results being some incredibly detailed timelines for when someone finally stops being a resident in California, as defined in state law.
But then I noticed that because of California’s proposed wealth tax (aka Billionaire Tax) on the November 2026 ballot, the SF Chronicle has already started a series of articles to answer the specific what-and-hows of the wealth tax. This is the first article, pertaining to enforcement, and it agrees that the FTB would be capable of pursuing any high-wealth individuals that the proposal would tax. https://www.sfchronicle.com/california/article/ca-billionaire-tax-mechanism-21330110.php
This proposed tax in California is written as a one-time tax, so the question of whether high-wealthy people could flee the state is nearly irrelevant, because either they’re subject to the tax or they’re beyond the reach of the US courts (eg Venus). Almost. The remaining questions are legal in nature, and don’t really change how the tax would be pursued. Whether FTB simply hires a dedicated team or outsources to private investigators, the task is still straightforward: follow the money.
Unlike civil lawsuit plaintiffs, who have more limited means of chasing down a defendant’s assets in order to get paid on a judgement, the California tax authorities enjoy the benefit of the subpoena power, that can be used to compel companies and banks to tell the tax authorities about where and how wealth is being held. It is, after all, a core power of a US state to administer a tax, especially when the tax is authorized directly from the sovereign power (ie the citizenry). Any other result would conflict with the very purpose of a republic: to unyieldingly serve the people.
100% inheritance tax on any value over 5 million, and slam shut any loopholes that get found.
Force them to either spend it stimulating the economy or give it up to society directly.
A small nitpick - always take inflation into account. “$5 million inflation-adjusted for 2025”.
It seems like a small thing, but setting a non-inflation adjusted amount is how good systems are undermined. For example, Medicare/Medicaid.
Medicare had some inflation adjustments built in - but it was for things like premiums and deductibles. In other words, the cost adjustments that fall on the consumer. Every year, the premiums go up, based on inflation.
Meanwhile, doctor reimbursements are NOT inflation adjusted. Thus, Medicare gets more expensive over time but doesn’t deliver the same quality of service (because the doctor reimbursements have less buying power).
Politicians use this trick ALL THE TIME, to gain the support of older voters while fucking younger voters over. They introduce a service that’s fully funded, but designed to enshitify over the coming decades.
Two prongs. One, tax loans against stock options and publicly traded shares. Two tax foreign investment dividends that constitute more than 10% of the total value of a publicly traded company. Step one makes them live off of dividends and realized assets. They can’t live off other loans of other people’s money and just keep hording assets, two pins them down and keeps them from trying to take their money and run to a tax haven.
They will eventually find a way around those, and you will have to adjust the tax code to accomodate, but that’s going to be true regardless. It’s a bit like digital hygene and cyber security. An endless arms race between states trying to build more effective risk management tools and people trying to exploit and the system and thus the people living within the system.
I’d refine that slightly - tax loans on anything except those for a primary residence, and loans used to create businesses that employ less than 100 people, or any business in service of the loan recipient. I’m sure that could be refined quite a bit. The intent being that they can buy a primary residence like anyone else and not be taxed on it - restrictions would apply like they’d actually have to live there, not sell it for “x” years and not build another primary residence for “x” years or then be taxed on it. The businesses would have to be big enough to be useful, not a business of rich guy’s 2 buddies that would just use the “fake” business to throw venture capital back in the rich guy’s business, or the rich guy buy a yacht and the “business” be him paying his own crew through a shell company to drive him around in his own yacht.
The specifics are going to need refinement, yes. The broad principles should hold though. One tax that forces them to spend down accumulated wealth, one to punish trying to offshore profits to tax havens.
this sounds promising, but how do you tax one thing against another?
That’s going to take a lot of math and market analysis to work out the specifics of. I’m just one rando on the internet. This was more of a high level framework to start from. With a team of wonks and a bit of time you could pin down precise numbers.
ah, but I was just wondering what it means
So, most billionaires just sit on unrealized assets and take out loans against them that are untaxable. This way they avoid capital gains taxes from spending down their assets, as long as they never sell them, they never have to pay taxes and can sit on them until they die. Then it’s their kid’s problem. If you put a tax on those loans that exceeds capital gains tax, now they’re losing money by living off loans, and they’re actually better off selling some shares and stock options to pay for their Bugatti and super yacht.
The foreign investment profits tax means if they skip town and try collecting income from the companies they own from a beach in the Cayman islands, (or a brothel in Thailand) they are still paying tax on it before that money leaves the local market. That’s going to cool off the market for foreign investment but it’s also going to mean that even if they skip town, they can’t dodge the taxes on income from domestic businesses.
That’s the thing. If you pay people to figure it out, they will. It’s only through massive defunding that the IRS has become completely incompetent. They used to be quite good at their jobs.
It’s called an income bracket. We already have them in place.
One of the big arguments is to tax wealth, not just income.
So. If I make 50,000 dollars a year but only need 40,000 to live. And I save that 10,000 a year for 20 years. You want to tax me on that $200,000 I saved? Lol wtf
Yes, but you’ll only pay like a thousand a year on those savings, and your costs will go down to 30,000 thanks to improved infrastructure, healthcare, etc.
That’s insanely stupid. You already pay taxes from your income and you pay taxes spending money. No ken should ever be taxed on money they have saved. Ever.
Nope, not only is it not stupid, it is pretty much the best possible taxation system unless your explicit goal is to keep poor people poor and rich people rich.
So YOU would be okay with the government taxing your savings account? Even though that money was already taxed? That is inssaaaaaane dude
So I actually currently live in a country which has this. Income taxes are correspondingly very low and public services are extremely good. So it’s not just that I would be okay with it, I am very satisfied with the arrangement, yes. You seem preoccupied with some kind of religious sanctity of your “savings account” without actually considering what the implications of such a policy are, that’s too bad.
No, but if you own $4billion in stocks and you borrow against it to live off of then you’ve realized that value and you get taxed heavily on it.
The idea is to get them to stop doing the “unlimited money glitch” of doing this.
Most of the current plans for wealth taxes start in the region of $5-$50 million, taxing wealth above that bracket (like other progressive taxes). Do you expect to save $5 million, let alone $50 million? If not, you won’t pay any wealth tax.
Many plans also exclude your ‘family house’ from that, so you could have a $3m house and $4m in the bank and still pay no wealth tax - you’re rich, but not filthy rich.
Most of the seriously proposed tax rates are also in the 1-3% range, maybe 5% on the very high end. Again, of wealth above that threshold.
There is also some argument about hoarding that $200k (again, more like $20m) you saved rather than using it. If you spend it eating out, drinking, getting your house renovated, flying somewhere - then you end up paying tax and spending money and there’s some trickle down. If it sits in a bank account or in stocks or real estate, less so.
If you spend it eating out, drinking, getting your house renovated, flying somewhere - then you end up paying tax and spending money and there’s some trickle down. If it sits in a bank account or in stocks or real estate, less so.
This is a fundamental misunderstanding of how an individual’s wealth can be useful to society. Societies become prosperous when they do things that are good for people, and that is what the money is best spent on - making society better. Sure, if they go to the bar every night and spend $200k getting hammered, maybe we netted a little extra tax revenue. And the bar is certainly doing better. But it is far better for everyone if that money becomes the startup capital for, say, a new plumbing business or taco restaurant or law firm or real estate development. Put it into something that actually does something
And that’s essentially what buying stocks is. Putting your money in stocks is good for the economy.
Most people with that little money aren’t going to go out of their way and assume the risk of investing in new ventures. They’re going to put it in some managed or unmanaged fund recommended by someone else, and that money is going to be invested in something safe and presumably profitable on an infinite time scale, like a megacorp (or 500).
It would amazing if the everyday worker’s savings went towards aiding the local community in starting new businesses, but I wouldn’t count on that being the default.
Steve Jobs notoriously took an annual salary of $1 despite being worth billions. Many of them do the same thing to avoid taxation.
Attainder.
An incremental step would be to look at the tax cuts of the last few decades, and role them back. That especially includes other types of income and passthroughs
As someone who has participated in startups, the options and shares market is a rigged game. We also need to restore rules for the ultra wealthy so they play the same game as we do
Wealth caps
Worldwide wealth caps
Start at 100 million…after a decade, lower that to 10 million
Anything, income, gift, whatever, over that goes 100% to taxes
Nobody had the right or need to be worth over 10 million dollars
Sounds good in theory. But it is inoperative in a capitalist society. Here’s a thought exercise:
Management might have a salary of $5 million but stock worth 1 billion. Maybe you expect they divest their stock? Okay, who buys? Who has control of the company? Does it become a societal asset? Can’t have a company run by a million-person committee.
Your wealth cap works where someone has liquidity over 100million. I suggest that few do as it’s not a tax-advantaged strategy.
Nah, just 10M wealth caps…
Management is free to give you a 100M bonus! If your current worth is 1M, 91M of that bonus will go to taxes and you receive 9M and after that, all goes to taxes.
If you have shares, and the value of those shares goes up? You’ll have to pay the taxes over that, sell some shares, and pay money to taxes. And yeah, companies would simply need boat loads of small shareholders.
And no, 100M is already way too much. If you need investment for bigger things, maybe think independent, government funded investment companies that could be a thing?
Although I agree, as a thought exercise, how about we also split up companies worth 1 billion dollars? We used to call them monopolies, but corporations have become very good at staying technically just under that bar. I’d argue this is part of the problem.
NOW you’re cooking with gas!!
Take their moneys.
the only sure way is to abolish private property and give the businesses to the workers
I would do a small transaction tax like 1% that should hopefully put the brakes on short term trading and tax inheritance the same as lottery winnings. Tax investment the same as income. for corps tax them based on their entire holdings right up to their top owner with all its subsidiaires but they can deduct any tax they pay in authorized countries (so the way we do sanctions now we could take away their taxes being able to be deducted).
